Latest news with #GrantThorntonIreland
Extra.ie
5 days ago
- Business
- Extra.ie
Surge in youth unemployment could signal warning light on economic dashboard
The recent spike in youth unemployment could be a bad omen for the country's finances, a leading economist has warned. Andrew Webb of Grant Thornton Ireland said figures showing that 12.2% of young people are unemployed may be a sign of businesses taking extra precautions due to uncertainty over tariffs from the US. Mr Webb also said that the Government must 'take this signal seriously' now – or the trend could become more problematic for the economy. Andrew Webb of Grant Thornton Ireland. Pic: File The comments come as US President Donald Trump's so-called Liberation Day tariffs took effect across the globe yesterday, with European exports to the US, including goods from Ireland, now subject to additional tariffs of 15%. Figures released by the Central Statistics Office yesterday show that 143,100 people were unemployed last month, an increase of 12,700 compared with July 2024. The rate of unemployment in July 2025 was 4.9%, up from 4.5% in the same month last year. Unemployment also rose on a month-by-month basis, with the rate of joblessness at 4.6% in June this year. A growing number of young people without jobs is seemingly driving the overall increase. US President Donald Trump. Pic:The monthly unemployment rate for people aged between 15-24 – also known as the youth unemployment rate – was 12.2% last month, up from 11.3% in June. This compares to a rate of 3.8% among individuals aged 25 to 74, up from the revised rate of 3.6% in June. Historical data from the CSO database shows that youth unemployment tends to spike in times of economic crisis. Just over 32% of people aged 15 to 24 were unemployed following the financial crash in March 2012, the highest volume since records began in 1998. The rate consistently fell to a low of 10.9% in November 2019 before shooting back up to 20% in the wake of COVID-19. Youth unemployment has held steady between 9% and 11% since January 2022, but the figure has crept above 11% since the election of Mr Trump in November 2024. The youth unemployment rate has increased since June. Pic: Getty Images The spike to 12.2% last month has now been raised as a cause for concern, as has the increase in overall unemployment. Mr Webb said that the uptick in joblessness 'is a warning light on the economic dashboard'. 'After three months of rate stability, this sharp increase, especially the spike in youth unemployment to 12.2%, suggests that business confidence may be softening,' the Grant Thornton chief economist said. 'Rising global uncertainty and the growing risk of tariffs are making firms more cautious. That hesitation is now showing up in the jobs data. Ireland's labour market remains strong by historical standards, but policymakers should take this signal seriously. If ignored, today's flicker could become a more persistent fault.' 'If ignored, today's flicker could become a more persistent fault,' Mr Webb said. Pic: Getty A 2014 paper from the Nevin Institute, which was written in the post-crash years when youth unemployment was over 20%, notes: 'Unemployment is harder to eradicate among younger age groups and harder still the longer it lasts.' Speaking to Dan O'Brien, chief economist of the Institute of International and European Affairs, said that it is normal for youth unemployment levels to be much higher than overall joblessness levels in Ireland, as the majority of young people stay in education. However, he went on to describe the uptick in overall unemployment last month as 'particularly hefty', describing the increase as 'bigger than usual', adding: 'I would not go as far as to say it marks the beginning of an economic downturn, but I think given the level of geopolitical uncertainty, it is something to watch out for.' It comes as US levies on more than 90 countries around the world came into effect overnight, with Ireland subject to the 15% rate imposed on the EU. Brazil has been slapped with the highest country-specific tariff at 50%, while Syria is now subject to tariffs of 41%. Switzerland was hit with a levy of 39% just last week, after negotiations broke down. Tánaiste Simon Harris said yesterday he is 'eager' to see further progress on trade talks around certain sectors, including the drinks industry, which is currently in limbo. As Minister for Foreign Affairs and Trade, Mr Harris said he was in contact with EU Trade Commissioner Maros Sefcovic, who he said is 'expecting the joint statement between the United States and the EU shortly'. The Tánaiste added: 'I think it's quite peculiar, quite frankly, that that hasn't yet arrived and been published, considering the tariffs are now in place.' The Fine Gael leader also said it is 'absolutely essential' to maximise the number of areas that can apply zero-for-zero tariffs. 'Whilst there are some areas that have already been agreed as exempt from tariffs, I'm very eager to see more progress made in more areas, including for the drinks industry, which is an important part of the Irish economy,' he said. Mr Harris added: 'From a pharma point of view, my position remains the same, as does the position of the European Union. There is huge potential and scope for the EU and the US to work together in the interests of patients, their economies and the pharma industry.'
Irish Independent
6 days ago
- Business
- Irish Independent
Almost 9,000 people lost their jobs in Ireland last month as uncertainty over tariffs grows
There were 143,100 people registered unemployed last month, compared with 134,500 in June. The seasonally adjusted rate of 4.9pc in July was up from 4.6pc in June, and on an annual basis it was up from the revised rate of 4.5pc in July 2024. There was a particularly noticeable uptick in joblessness numbers within the 15 to 24-year-old age cohort, with the youth unemployment rate of 12.2pc in July up from the 11.3pc recorded in June. Andrew Webb, chief economist at Grant Thornton Ireland, said the rise in the headline rate to 4.9pc is a warning light on the economic dashboard. 'After three months of rate stability, this sharp increase, especially the spike in youth unemployment to 12.2pc, suggests that business confidence may be softening,' he said. 'Rising global uncertainty and the growing risk of tariffs are making firms more cautious. That hesitation is now showing up in the jobs data. Ireland's labour market remains strong by historical standards, but policymakers should take this signal seriously. If ignored, today's flicker could become a more persistent fault.' Tariffs of between 10pc and 50pc were imposed by the US today on dozens of countries, while the White House and European Commission continued negotiations on a joint statement intended to add detail to their headline trade deal. The document will not be legally binding. As US president Donald Trump threatened a 100pc tariff on computer chips, the commission insisted that a 15pc rate will still apply to EU exports. 'We have a commitment for a 15pc across-the-board tariff ceiling,' said commission spokesman Olof Gill. 'That captures all products.' Talks about exempting certain goods are continuing, according to Mr Gill, but European wine and spirits will not escape the 15pc tariff that hits most imports from the EU to America from tomorrow. ADVERTISEMENT With the US accounting for about one third of all Irish exports, the impact of a long-term 15pc tariff is likely to be substantial, particularly as it includes pharma. The drag on economic growth is likely to suppress inflation, as was seen in the decrease to 1.7pc last month, mainly caused by lower prices for clothes. The continuing growth in wages could put upward pressure on prices, however. The Central Bank of Ireland has forecast that Compensation Per Employee will rise by 3.8pc on average from 2025 to 2027. In its most recent Quarterly Bulletin, the bank also pointed out that firms could react to the uncertainty surrounding tariffs by adjusting working hours rather than laying off staff. Average hours worked already remain below pre-pandemic levels across many sectors. The hiring platform Indeed said job postings on its Irish website increased slightly to 11pc in July, but are still down from the 19pc seen at the start of the year. 'This confirms a gradual and ongoing, but by no means worrying, cooling of the labour market,' said Jack Kennedy, a senior economist with Indeed. 'Even though the level of Irish job postings has reduced, the unemployment rate has remained below 5pc with employers still struggling to recruit staff in certain categories. This month marks the 42nd month in a row that the unemployment rate has been below 5pc.'
Irish Independent
6 days ago
- Business
- Irish Independent
Over 12,000 people lost their jobs in Ireland last month
There were 143,100 people registered unemployed last month, compared with 134,500 in June. The seasonally adjusted rate of 4.9pc in July was up from 4.6pc in June, and on an annual basis it was up from the revised rate of 4.5pc in July 2024. There was a particularly noticeable uptick in joblessness numbers within the 15 to 24-year-old age cohort, with the youth unemployment rate of 12.2pc in July up from the 11.3pc recorded in June. Andrew Webb, chief economist at Grant Thornton Ireland, said the rise in the headline rate to 4.9pc is a warning light on the economic dashboard. 'After three months of rate stability, this sharp increase, especially the spike in youth unemployment to 12.2pc, suggests that business confidence may be softening,' he said. 'Rising global uncertainty and the growing risk of tariffs are making firms more cautious. That hesitation is now showing up in the jobs data. Ireland's labour market remains strong by historical standards, but policymakers should take this signal seriously. If ignored, today's flicker could become a more persistent fault.' Tariffs of between 10pc and 50pc were imposed by the US today on dozens of countries, while the White House and European Commission continued negotiations on a joint statement intended to add detail to their headline trade deal. The document will not be legally binding. As President Donald Trump threatened a 100pc tariff on computer chips, the commission insisted that a 15pc rate will still apply to EU exports. 'We have a commitment for a 15pc across-the-board tariff ceiling,' said commission spokesman Olof Gill. 'That captures all products.' Talks about exempting certain goods are continuing, according to Mr Gill, but European wine and spirits will not escape the 15pc tariff that hits most imports from the EU to America from tomorrow. With the US accounting for about one third of all Irish exports, the impact of a long-term 15pc tariff is likely to be substantial, particularly as it includes pharma. The drag on economic growth is likely to suppress inflation, as was seen in the decrease to 1.7pc last month, mainly caused by lower prices for clothes. The continuing growth in wages could put upward pressure on prices, however. The Central Bank of Ireland has forecast that Compensation Per Employee will rise by 3.8pc on average from 2025 to 2027. In its most recent Quarterly Bulletin, the bank also pointed out that firms could react to the uncertainty surrounding tariffs by adjusting working hours rather than laying off staff. Average hours worked already remain below pre-pandemic levels across many sectors. The hiring platform Indeed said job postings on its Irish website increased slightly to 11pc in July, but are still down from the 19pc seen at the start of the year. 'This confirms a gradual and ongoing, but by no means worrying, cooling of the labour market,' said Jack Kennedy, a senior economist with Indeed. 'Even though the level of Irish job postings has reduced, the unemployment rate has remained below 5pc with employers still struggling to recruit staff in certain categories. This month marks the 42nd month in a row that the unemployment rate has been below 5pc.'
Irish Independent
6 days ago
- Business
- Irish Independent
Almost 9,000 people lost their jobs in Ireland last month
There were 143,100 people registered unemployed last month, compared with 134,500 in June. The seasonally adjusted rate of 4.9pc in July was up from 4.6pc in June, and on an annual basis it was up from the revised rate of 4.5pc in July 2024. There was a particularly noticeable uptick in joblessness numbers within the 15 to 24-year-old age cohort, with the youth unemployment rate of 12.2pc in July up from the 11.3pc recorded in June. Andrew Webb, chief economist at Grant Thornton Ireland, said the rise in the headline rate to 4.9pc is a warning light on the economic dashboard. 'After three months of rate stability, this sharp increase, especially the spike in youth unemployment to 12.2pc, suggests that business confidence may be softening,' he said. 'Rising global uncertainty and the growing risk of tariffs are making firms more cautious. That hesitation is now showing up in the jobs data. Ireland's labour market remains strong by historical standards, but policymakers should take this signal seriously. If ignored, today's flicker could become a more persistent fault.' Tariffs of between 10pc and 50pc were imposed by the US today on dozens of countries, while the White House and European Commission continued negotiations on a joint statement intended to add detail to their headline trade deal. The document will not be legally binding. As President Donald Trump threatened a 100pc tariff on computer chips, the commission insisted that a 15pc rate will still apply to EU exports. 'We have a commitment for a 15pc across-the-board tariff ceiling,' said commission spokesman Olof Gill. 'That captures all products.' Talks about exempting certain goods are continuing, according to Mr Gill, but European wine and spirits will not escape the 15pc tariff that hits most imports from the EU to America from tomorrow. With the US accounting for about one third of all Irish exports, the impact of a long-term 15pc tariff is likely to be substantial, particularly as it includes pharma. The drag on economic growth is likely to suppress inflation, as was seen in the decrease to 1.7pc last month, mainly caused by lower prices for clothes. The continuing growth in wages could put upward pressure on prices, however. The Central Bank of Ireland has forecast that Compensation Per Employee will rise by 3.8pc on average from 2025 to 2027. In its most recent Quarterly Bulletin, the bank also pointed out that firms could react to the uncertainty surrounding tariffs by adjusting working hours rather than laying off staff. Average hours worked already remain below pre-pandemic levels across many sectors. The hiring platform Indeed said job postings on its Irish website increased slightly to 11pc in July, but are still down from the 19pc seen at the start of the year. 'This confirms a gradual and ongoing, but by no means worrying, cooling of the labour market,' said Jack Kennedy, a senior economist with Indeed. 'Even though the level of Irish job postings has reduced, the unemployment rate has remained below 5pc with employers still struggling to recruit staff in certain categories. This month marks the 42nd month in a row that the unemployment rate has been below 5pc.'
Irish Independent
13-07-2025
- Business
- Irish Independent
Succession crisis fears as SMEs are warned they 55pc tax risk if business is sold to management
Entrepreneurs selling to management can be hit with tax bills worth up to 55pc of the sale value, as the Revenue Commissioners can treat this as a dividend for the owner, according to Una Ryan, international tax partner at Grant Thornton Ireland. Sales to private equity or larger trade rivals are charged capital gains tax (CGT) of 33pc, with the potential for further reliefs. The certainty over tax can make this exit route more attractive for owners. Ryan warned confusion and uncertainty over the tax treatment of certain exits could lead to a succession crisis at SMEs, particularly among companies wanting to sell to their management teams. While private equity and large trade sales can mean a chunky payday for SME owners, Ryan said many of her clients were eager to ensure their businesses stayed with management when they retire. 'The management team are invested in the company, they see it as their company and they want what is best for the company in the long-term,' she said. 'A private equity play is, get in, make as much money as possible, and get out. They have a three-to-five-year life-cycle. 'My client portfolio consists of an awful lot of owner-managers and family-owned businesses. Nobody lives forever. Everyone is always looking at retirement or future planning, and how they exit from their company. 'A lot of them see their business as their babies,' she adds. 'So, they want to keep it with a steady ship.' If you buy back an employee's shares, it is treated as a distribution, meaning it is income Grant Thornton Ireland is asking the Government to change how sales to management teams are treated in this year's Budget. The firm is seeking to ensure these exits are CGT events, with certainty provided by legislation to avoid the risk of a huge income tax bill for sellers. Ryan also recommended changes to the tax treatment of employees with shares in SMEs versus those at listed multinationals. 'If employees get shares in owner-managed businesses or family businesses, there is no market for them in the same way as if someone is working in one of the large multinationals. 'So, under first principles in Irish law, if you buy back an employee's shares, it is treated as a distribution, meaning it is income. That is leading to the point again that if that employee is fully exiting and selling their shares, why shouldn't it be treated as a CGT event? 'If there is a similar employee in a listed multinational and they are retiring and they sell their shares, and they are selling it on the market, then they get CGT treatment.'
